The CIS-7 Initiative was launched in 2002 and endorsed by ministers from the CIS-7 and donor countries, with the objective of promoting poverty reduction, economic growth, and debt sustainability among the seven poorest countries of the Commonwealth of Independent States (CIS). This volume draws from the follow-up conference held in Lucerne, Switzerland, in January 2003. The objective of this conference was to achieve an understanding of the development agenda in the seven countries and the key policy measures to be taken by the governments and donors to improve future prospects for the countries' populations.

KennedyDavidSamuelFankhauser andMartinRaiser2003“Low Pressure, High Tension: 'The Energy-Water Nexus in the CIS-7 Countries,”paper presented at the Lucerne Conference on the CIS-7 InitiativeLucerne, SwitzerlandJanuary2003 (available at www.cis7.org).

At the time of writing, the authors were affiliated with the European Bank for Reconstruction and Development (EBRD). The views expressed in this chapter are the views of the authors, not of the EBRD. The chapter draws on the analysis in EBRD (2001).

An alternative is to introduce a lifeline tariff with a low free consumption block and a high marginal tariff, together with the option to pay a unit tariff over all consumption at a lower marginal rate. This mechanism docs not impose higher tariffs on consumers, rather, it allows them to choose whether or not to pay a higher rate.

In the above example of the Toktogul Cascade, the conditions for power trade are present even without adding a charge For water. However, between the Kyrgyz Republic and Kazakhstan, for instance, power trade would not take place based on cost differences for power generation alone.